There is an overall account balance cap on first home saver accounts.
For the 2011-12 financial year, the cap is $85,000. The cap will be indexed periodically in $5,000 increments. For current and past rates, refer to First home saver accounts - rates and thresholds. Once your account exceeds the cap, you cannot make any further personal contributions to it. However, any earnings and any outstanding government contributions can still be paid into the account.
If a personal contribution will cause you to exceed the account balance cap, the account provider must return the amount that exceeds the cap. If the personal contribution is from a third party, the amount will be returned to you, not the third party.
For the purpose of the examples, we have estimated the future rates and thresholds. The official rates and thresholds will be available on the First home saver accounts - rates and thresholds page and will be updated as they become available.
Example
Megan's account balance is $85,000. On 1 May 2014, Megan makes a personal contribution of $6,000 to her first home saver account. If the account balance cap for the 2013-14 financial year is $90,000, the provider can only pay $5,000 into Megan's account and must refund $1,000 to her or pay the $1,000 to a different account for her.
Megan is entitled to a government contribution on her $5,000 personal contribution. Even though Megan's account balance has reached the cap, the government contribution and any earnings can still be paid into her account. Megan can keep the account until she buys or builds her first home. However, she cannot make any further personal contributions to the account.
You can transfer funds from one first home saver account to another, even if the closing balance of the old account is more than the cap.
Once you have reached the account balance cap, you cannot make any further personal contributions into your account, even if indexation increases the cap in later years.
Your account balance may also fluctuate, causing you to move over or under the cap. For example, fees debited to an account may reduce the balance. However, once you exceed the cap, you cannot make any more personal contributions.
You need to know the account balance cap for the financial year if you are likely to reach or exceed it. We will publish the cap for each year.
Example
On 28 April 2013, Steven makes a contribution to his first home saver account and his balance reaches $85,000. On 15 August 2013, Steven's provider pays earnings of $5,100 to his account, bringing his account balance to $90,100. If the account balance cap for 2013-14 is $90,000, Stephen has exceeded his account balance cap and cannot make any further personal contributions.
On 1 November 2013, an account keeping fee of $165 is debited to Steven's first home saver account and his account balance falls to $89,935. As Steven exceeded the cap on 28 April 2013, he cannot make any further personal contributions, even though the account balance has fallen below the cap. However, any earnings and any outstanding government contribution can still be contributed into his account.
Last Modified: Monday, 25 July 2011